AMARILLO, Texas (KAMR/KCIT) — A prominent Amarillo businessman recently filed a lawsuit against the city of Amarillo in Potter County, aiming at preventing the city from moving forward with issuing debt for the Amarillo Civic Center Complex project.
According to court documents filed on May 27 in the 108th Judicial District Court in Potter County, Alex Fairly, the president of the Fairly Group, filed a lawsuit after the Amarillo City Council voted to move forward to issue debt for the expansion and renovation of the Amarillo Civic Center Complex during a regular meeting last month.
How did we get here?
According to previous reports by MyHighPlains.com, the Amarillo City Council voted 4-1 to approve the issuance of $260 million in tax and revenue notes to fund the expansion and renovations to the Amarillo Civic Center Complex on May 24. This comes after 61% of Amarillo residents voted against the initial Civic Center bond issue in the November 2020 election.
After the failed bond measure in November 2020, city of Amarillo officials brought back the Civic Center Complex-related conversation to the public in June 2021, approving a measure for the city to enter into a pre-development services agreement with Garfield Public/Private LLC to explore potential ways to fund the project.
During the May 24 meeting of the Amarillo City Council, officials heard the final report from Garfield Public/Private LLC before the council voted on the ordinance that would help fund the project.
As the ordinance was being considered, Laura Storrs, the city of Amarillo’s assistant city manager and chief financial officer, said at the time that the ordinance could cause the city’s tax rate to increase in future years to $0.57 from the current rate of $0.44, stressing that future councils would be able to decide how to pay for the debt issuance of the Civic Center project. Officials also said at the time that the city would look to use naming rights and sponsorships, as well as hotel occupancy tax and sales tax revenue, along with the tax and revenue notes, to pay for the project.
“Each year, each council goes through setting a property tax rate. So, as we look at outstanding debt, if there are other funding sources on some of the debt that’s backed by property taxes and council chooses instead to pay some of that debt service with another funding source, that lowers the amount that would need to be considered on the property tax rate for that year,” Storrs said at the time.
Amarillo City Councilmember Cole Stanley, the lone member who voted against the measure, repeatedly asked the council why this measure had to be voted on during the May 24 meeting, asking for two more weeks to consider the item.
At the time, Amarillo Mayor Ginger Nelson expressed her opinion regarding the importance of moving forward with the project as soon as possible, saying that in “the environment that we’re in, it’s just not the hand that we’ve been dealt,” to push the measure down the road any longer.
What does the lawsuit say?
In the lawsuit, Fairly, as the plaintiff, is seeking a “declaratory judgment,” a measure that would ultimately say what the Amarillo City Council voted on was unlawful and illegal because it differs from the election results from 2020.
Fairly is also seeking “injunctive relief” in the lawsuit, which would prevent the city from using tax and revenue notes for this measure. Fairly believes the use of these notes is “against the clear will of the voters… in violation of Texas law and in dereliction of the City Council’s duty and responsibility to serve the taxpaying citizens and voters of Amarillo.”
The lawsuit said that while Fairly believes the voters were clear on their opinion of the project due to the results of the 2020 General Election, the city failed to listen to the voters as it continued to search for ways to fund the overall project.
The lawsuit claims that some members of the council, but not all, met with the Garfield Public/Private LLC group to explore different options for the project. As a result of the report, presented during the May 24 meeting, the lawsuit claims the city was unable to bring aboard any private investors which would be willing to be involved in funding the project, ultimately developing the plan to use the tax and revenue notes in reaction to that.
Officials continued to claim in the lawsuit that the plan to use tax and revenue notes was never brought forward to Amarillo residents prior to the May 24 City Council meeting, giving them the chance to voice their opinion on the measure.
Through the 4-1 vote to approve the tax and revenue notes for the Amarillo Civic Center project on May 24, the lawsuit claims that the city is intending to not let voters in on the decision, impacting their taxes in the process, “potentially for decades.” The lawsuit states that the tax and revenue notes-related ordinance, if enacted, would increase the city’s unbudgeted ad valorem tax collections from $39,235,000 in 2024 to $47,835,000 in 2029.
While the lawsuit initially seeks a “temporary injunction,” preventing the use of the notes, officials said in the lawsuit that the goal is to seek a “permanent injunction,” ultimately preventing the overall use of the notes for this project. Officials claim in the lawsuit that the use of the notes proves that city officials are “in a hurry to burden Amarillo taxpayers” even though they do not ultimately support the project.
“The City already knows how the majority of taxpayers feel about paying for this project with debt, because the City has already asked them and received a resounding rejection of the proposal (in the November 2020 election),” the documents said. “Nevertheless, the City has expressed a desire to move as quickly as possible to inucr over one-quarter billion dollars in unbudgeted debt and to tax Amarilloans’ property to service that debt.”
How are the entities responding to the lawsuit?
MyHighPlains.com has reached out to Fairly regarding the lawsuit. While Fairly has not responded to MyHighPlains.com’s direct request for comment, Fairly did comment on the lawsuit on the Inspire Amarillo webpage.
According to the statement, Fairly claims the proposal for the expansion and renovation of the Amarillo Civic Center Complex was “largely developed behind the scenes” and was “approved with no advance notice to the public or opportunity for input,” given that the project will likely raise taxes for Amarillo residents.
Mirroring the wording in the lawsuit, Fairly continues to claim that the city of Amarillo is using these tax and revenue notes in an illegal fashion, originally being intended to “issue shorter-term debt for necesary/critical or emergency types of project,” something that Fairly believes the civic center project is not.
At the end of the statement, Fairly said that he has spoken with “multiple attorneys” who reportedly said that the debt issuance “may have violated both the spirit and letter of Texas law.” Fairly said this is why he filed the lawsuit, aiming to pause the project and to challenge whether or not what the Amarillo City Council voted in favor of was legal.
“Having to bring a lawsuit is never a preferred option,” Fairly said in the statement. “It will cost both the city and me. But core American principles are worth defending… When government leaders try to impose taxes without notice or a good-faith discussion flashing red lights should be going off for every citizen, no matter which side of an issue you are on. And it’s especially concerning when elected officials contradict voters and potentially circumvent the law to do it.”
Officials with the city of Amarillo told MyHighPlains.com that the city does not comment on pending litigation.
According to court documents, the lawsuit was served to the city of Amarillo as of May 31. The documents state that Fairly, as the plaintiff, is “(demanding) a trial by jury on all issues” listed in the original petition. There have been no further documents filed under this lawsuit in the 108th Judicial District Court in Potter County as of Wednesday.